Politics, business: can tariffs work?
Self-tutoring about international trade: the tutor mentions the idea of tariff feasibility.
The following is by my understanding.
The general motivation behind a tariff is to keep production in-house, since the tariff makes the imported product more expensive. Then, the local producer’s alternative offering becomes relatively more competitive.
In the case of the US, one idea is that their market is the largest in the world, so producers should be willing to locate production there in order to sell their products free of tariff.
The problem seems to be many goods are just more expensive to produce in the US than where they are produced right now. Among the reasons are likely regulations – environmental, labour, etc.
The last time the US ran a trade surplus was 1975. Americans seem to very much want imported goods. The Administration may argue that, not having to follow the same regulations that US in-house producers do, some foreign manufacturers are effectively being subsidized. A tariff, they might argue, gives the domestic producer some relief.
Yet, a fundamental problem with tariffs is that the government receives them. Therefore, a tariff is just another tax, likely to be used to fund some questionable government project while US citizens pay more for the products they want. The tariff doesn’t seem to solve the root cause of why Americans want to buy imports.
Source:
Jack of Oracle Tutoring by Jack and Diane, Campbell River, BC.